The "Secret Sauce" to Accelerate Green Building

10/12/2017 09:51 am ET

You may be surprised to learn that buildings consume more energy around the world than any other sector. More than industry. More than transportation.

But the outlook is changing, because in the U.S., nearly 40% of new commercial construction is now certified as green, sustainable construction under the LEED green building rating system or Energy Star program. That’s up from just 2% in 2005. That’s a major change in commercial real estate in just 12 short years.

Green buildings save energy and water – they’re good for the planet and essential for the future of sustainability as cities grow. And, it turns out, green buildings are good for business too.

I’ve been fascinated to understand how the commercial buildings industry transformed itself so quickly, virtually without regulation. Green building even accelerated during the recession.

I’ve been searching for the “secret sauce”, and I think I’ve found it in what I call the Value Trifecta Driving Green Buildings. I’ve written about this topic before on this blog, and I’m exploring it in greater detail on the most recent episode of The Race to 9 Billion.

Green building is accelerating because of three separate and distinct value mechanisms for the three major stakeholders: building investors, building owners and building tenants.

Separately, these value drivers are powerful motivators – but combined, they start to reveal the reasons behind the revolutionary adoption of green building practices.

Dr. Nils Kok is an associate professor of the Maastricht University in Holland and Chief Economist for the real estate and data analytics company GeoPhy. He is an expert on finance in real estate; I spent some time talking with him about the Value Trifecta Driving Green Buildings on the latest episode of The Race to 9 Billion, which is available now.

You can find The Race to 9 Billion on iTunes, Google Play, and www.raceto9billion.com. I’ll be tweeting about it too, so follow me on Twitter @JohnMandyck to join the conversation.